The Decibel Why the condo bubble burst could lead to better housing
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Nov 6, 2025 Erica Alini, a personal economics reporter for The Globe and Mail, specializes in housing and real estate. She discusses the collapse of Canada’s condo market, highlighting the causes behind the space-crunching shoebox condos. Erica delves into the concept of the 'missing middle'—townhomes and small apartments that could provide more practical housing solutions. She explores regulatory barriers, zoning challenges, and the need for design innovations in high-density living. Ultimately, Erica offers a mixed outlook on achieving better housing solutions amidst the crisis.
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Journalist's Personal Small-Unit Experience
- Erica Alini moved to Canada in 2010 and rented a one-bedroom-plus-den in downtown Toronto.
- She found it small, noisy, lacking storage, and surprisingly expensive compared with apartments she knew.
Condo Market Crisis Triggered By Rate Shock
- Toronto is the epicenter of a condo market crisis that began when interest rates rose in spring 2022.
- Rising mortgage and construction costs plus falling rents ended the speculative pre-construction flipping model.
Condos Have Shrunk Dramatically
- Median new condo sizes dropped from about 1,000 sq ft in the 1990s to ~640 sq ft recently.
- Micro units under 450 sq ft — even under 300 sq ft — became common amid investor-driven demand.